Statistics Canada Releases Year-End Figures on International Travel, Travel Deficit and Government Revenue Attributable to Tourism

posted on March 7, 2013

Statistics Canada has released a number of key year-end indicators that altogether help to paint a telling picture of the state of Canada’s tourism industry in 2012.

International Travel Statistics

Canada showed modest growth in international visitor arrivals in 2012, edging up 1.8% to 16.3 million visitors. This growth was made up of increases in visitors from the U.S. (+2.2%, to 11.8 million) and non-U.S. visitors (0.9%, to 4.5 million).

It should be noted that since tourism is growing at a pace of about 4% around the world, growth rates that hover around 1-2% are comparatively low. Nevertheless, the 1.8% rate of growth was better in 2012 than in 2011, when the number of visitors actually dipped by -0.8%.

While Canada saw fewer visitors from traditional markets like France, Germany and the U.K., three of the main emerging markets all saw big increases: China +18% (+50 000 visitors), India (+5.3%) and Brazil (+6.4%). Mexico and Japan also rebounded from uncharacteristically slow years in 2011, growing by 7.3% and 7.2% respectively in 2012.

Canada’s International Travel Deficit Reaches Record Level

Canada’s international travel deficit (the difference between the amount of money spent by Canadians traveling abroad and the amount spent by international visitors arriving in Canada) reached a record $17.8B in 2012, an increase of $1.5B (6.5%) over 2011.

Payments (spending by Canadians in other countries) grew 6.7% to $35.2 B, while receipts (spending by international travellers in Canada) grew only 4.4% to $17.3B.

Like many cold-weather countries, Canada has traditionally posted a modest deficit between the amount that its citizens spend outside of Canada and the amount that international travellers spend in Canada. Since this deficit hovered for several years in the $2B range just a decade ago, the 2012 figures are alarming.

In a North American context, the longer-term trend (2007-2012) in the US-Canada travel balance is also concerning. Canadian spending in US grew 45% while US spending in Canada decreased by -12.4%

Government Revenue Attributable to Tourism

Tourism generated $21.4 billion in tax revenues for governments in Canada in 2011, up 6.6% from 2010.

Over half of the government revenue from tourism, or $11.2 billion, came from taxes on products such as the Goods and Services Tax and provincial sales taxes in 2011. Taxes on income from employment and business profits generated $4.7 billion.

Another $2.8 billion was raised through other taxes on production and intermediate inputs, while contributions to social insurance plans amounted to $2.3 billion. Government sales of goods and services to tourists added $483 million.

International visitors accounted for 22% of total government revenue from tourism in 2011, while Canadians accounted for 78%.

For every $100 of tourism spending by international visitors, $30.85 in government revenue was generated, while every $100 spent by Canadians in Canada generated $26.30.